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Delivery charge Installation charge Additional components to increase capacity Service and maintenance Replacement parts Test runs BKAR1013 FINANCIAL ACCOUNTING AND REPORTING I Small spare parts 75,000 50,250 107,250 24,750 17,000 16,500 2,600 REQUIRED: Calculate the cost of land, land improvement, building and equipment based on MFRS 116 Property, Plant and Equipment. Please show your calculations.

Delivery charge Installation charge Additional components to increase capacity Service and maintenance Replacement parts Test runs BKAR1013 FINANCIAL ACCOUNTING AND REPORTING I Small spare parts 75,000 50,250 107,250 24,750 17,000 16,500 2,600 REQUIRED: Calculate the cost of land, land improvement, building and equipment based on MFRS 116 Property, Plant and Equipment. Please show your calculations.

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 8PA: Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the...
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BKARI013 FINANCIAL ACCOUNTING AND REPORTING I Delivery charge 75,000 Installation charge 50,250 Additional components to increase capacity 107,250 Service and maintenance 24,750 Replacement parts 17,000 Test runs 16,500 Small spare parts 2,600 REQUIRED: Calculate the cost of land, land improvement, building and equipment based on MFRS 116 Property, Plant and Equipment. Please show your calculations. QUESTION 2 Ariana Bhd is a pharmaceutical distributor which purchases prescription medicines and other medical products directly from pharmaceutical manufacturers and distribute across the country. During year 2020, Ariana Bhd has acquired three types of tangible non-current assets. The first non-current asset bought is a brand new machine that can facilitate medicines labelling process using the new technology, thus increase the capacity of distribution per day. The machine was bought on 15 April 2020 at a quoted price of RM4,000,000 on a term of 2/20, n/60. Ariana Bhd paid the machine in the discount period. In addition, the following expenditure incurred3; i. Installation cost of RM150,000 and cost of storage for the machine of RM75,000 as it was delivered before the factory is ready for installation. Insurance of RM225,000 were incurred as the management seek to reduce the risk of fire. Out of this amount, 25% was meant to secure the machine while it still in transit. Expense incurred to test the functionality of the installation amounting to RM300,000. ii. iii. iv. Maintenance contract for the machine sign-up for the next three years amounting to RM150.000. The machine incurred a transportation costs of RM120,000 to bring it to the factory. Staff training costs to handle the machine amounted to RM180,000. V. VI. The second non-current asset acquired by Ariana Bhd is a two-storey building which to be used as its warehouse. The value of the building was uncertain because the building was in poor condition and also unique in its type. This building was bought on 31 May 2020 by issuing 3
Transcribed Image Text:BKARI013 FINANCIAL ACCOUNTING AND REPORTING I Delivery charge 75,000 Installation charge 50,250 Additional components to increase capacity 107,250 Service and maintenance 24,750 Replacement parts 17,000 Test runs 16,500 Small spare parts 2,600 REQUIRED: Calculate the cost of land, land improvement, building and equipment based on MFRS 116 Property, Plant and Equipment. Please show your calculations. QUESTION 2 Ariana Bhd is a pharmaceutical distributor which purchases prescription medicines and other medical products directly from pharmaceutical manufacturers and distribute across the country. During year 2020, Ariana Bhd has acquired three types of tangible non-current assets. The first non-current asset bought is a brand new machine that can facilitate medicines labelling process using the new technology, thus increase the capacity of distribution per day. The machine was bought on 15 April 2020 at a quoted price of RM4,000,000 on a term of 2/20, n/60. Ariana Bhd paid the machine in the discount period. In addition, the following expenditure incurred3; i. Installation cost of RM150,000 and cost of storage for the machine of RM75,000 as it was delivered before the factory is ready for installation. Insurance of RM225,000 were incurred as the management seek to reduce the risk of fire. Out of this amount, 25% was meant to secure the machine while it still in transit. Expense incurred to test the functionality of the installation amounting to RM300,000. ii. iii. iv. Maintenance contract for the machine sign-up for the next three years amounting to RM150.000. The machine incurred a transportation costs of RM120,000 to bring it to the factory. Staff training costs to handle the machine amounted to RM180,000. V. VI. The second non-current asset acquired by Ariana Bhd is a two-storey building which to be used as its warehouse. The value of the building was uncertain because the building was in poor condition and also unique in its type. This building was bought on 31 May 2020 by issuing 3
BKARI013 FINANCIAL ACCOUNTING AND REPORTING I QUESTION 1 During the year 2020, Akasia Maju Bhd (AMB) purchased a piece of land with an existing building for RM1,125,000. The land was valued at RM1,050,000 and the building at RM75,000. AMB demolished the building and constructed a new building as headquarters on the site. The new building and land improvement are expected to last for 80 years with no residual value and the construction was fully completed by the end of the year 2020. The following represents the various items related to the project in year 2020: Items RM Lawyer's fee to close the purchase deal 22,500 Cost of land fill and clearing 18,000 Architect's fee 120,000 Fencing around the land 60,000 Cost of demolishing existing building 97,500 Interest on financing of construction paid during construction 282,000 Receipts from sale of demolition scraps 15,000 Construction costs 1,200,000 Landscaping (trees and shrubs) 30,000 Parking lots and concrete walks on the property 180,000 Insurance premium during construction period 18,000 Moving costs from old headquarters to new headquarters 150,000 To accommodate the mission of improving productivity and efficiency, the company also bought a new special equipment and made the following payments. Items RM Manufacturer's list price 4,303,500 Trade discount 37,500 2
Transcribed Image Text:BKARI013 FINANCIAL ACCOUNTING AND REPORTING I QUESTION 1 During the year 2020, Akasia Maju Bhd (AMB) purchased a piece of land with an existing building for RM1,125,000. The land was valued at RM1,050,000 and the building at RM75,000. AMB demolished the building and constructed a new building as headquarters on the site. The new building and land improvement are expected to last for 80 years with no residual value and the construction was fully completed by the end of the year 2020. The following represents the various items related to the project in year 2020: Items RM Lawyer's fee to close the purchase deal 22,500 Cost of land fill and clearing 18,000 Architect's fee 120,000 Fencing around the land 60,000 Cost of demolishing existing building 97,500 Interest on financing of construction paid during construction 282,000 Receipts from sale of demolition scraps 15,000 Construction costs 1,200,000 Landscaping (trees and shrubs) 30,000 Parking lots and concrete walks on the property 180,000 Insurance premium during construction period 18,000 Moving costs from old headquarters to new headquarters 150,000 To accommodate the mission of improving productivity and efficiency, the company also bought a new special equipment and made the following payments. Items RM Manufacturer's list price 4,303,500 Trade discount 37,500 2
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